15
Wednesday, December 13, 1972
STATEMENT ON HONG KONG'S STERLING RESERVES
The Financial Secretary, the Hon. C.P. Haddon-Cave, today described
the current year as an exceptional one in the international monetary field
and said that many of the decisions taken in the financial capitals of the
world have had a very special significance for Hong Kong.
Speaking in the Legislative Council this afternoon, he said that
while our reserves had suffered serious losses in both Hong Kong and U.S.
dollar terms it was a tribute "to the underlying strength of our position that
confidence in the exchange stability of the Hong Kong dollar remains un-impaired."
The Financial Secretary said that at the time of the floating of the
Pound Sterling, the value of the sterling assets held by the Hong Kong Government,
including those bank-owned assets guaranteed under the Exchange Fund Guarantee
Scheme, amounted to approximately £900 million.
In terms of Hong Kong dollars, the whole of the loss resulting from
the complicated and quite unforeseen sequence of events following the declino
in the value of Sterling from US $2.6057 to US $2.40 fell on public funds. The
loss came to approximately HK $890 million.
The Financial Secretary emphasized, however, that while this figure
represented an "accurate picture" it should not be taken as "exact" since
the rate not only continued to fluctuate but also the amounts held were
constantly changing.
The losses, he said, should be viewed against the advantages Hong Kong
had received from having invested in Sterling.
"Interest